Hearing of the House Financial Services Committee - H.R. 4868, Housing Preservation And Tenant Protection Act Of 2010

Hearing

Rep. Shelley Moore Capito, R-W.Va., the Ranking Republican Member of the House Financial Services Subcommittee on Housing and Community Opportunity, made the following opening statement at today's Financial Services Committee hearing titled, "H.R. 4868, the Housing Preservation and Tenant Protection Act of 2010":

"Thank you, Chairwoman Waters for holding this important hearing today on legislation introduced by Chairman Frank, H.R. 4868, the Housing Preservation and Tenant Protection Act of 2010, which is designed to address the preservation of the existing affordable housing stock.

"Since the 1960s, the federal government has supported the production of privately owned properties that are affordable to low and moderate income families-those with incomes of 80 percent or less of area median income. HUD has historically supported the building and maintaining of affordable housing by offering property owners favorable mortgage financing, long-term rental assistance contracts, or both, in exchange for owners' commitments to house low-income tenants for at least 20 years and, in some cases, up to 40 years. The worry has always been that as these contracts expire or reach maturity that current owners will chose to convert the properties to market rate which will translate into a significant loss of existing affordable housing stock. Congress has grappled with how best to achieve the goal of preservation.

"I think it is important to highlight the important role that the private sector has played in the availability of affordable housing. Over the years, the creation and preservation of affordable housing has been a collaborative public-private partnership. While the federal government has played a key role in the availability of affordable housing for low and moderate families, it would not have been possible without private sector participation, and in that regard, both for-profit and not-for-profit entities have been important participants in efforts to preserve affordable housing.

"For this reason, it is imperative that any legislation designed to preserve the assisted housing inventory must recognize the complexity of preservation transactions and it must incentivize rather than penalize those that participate. Unfortunately, I share many of the concerns that will be raised today by some of our witnesses and that are outlined in this letter dated March 23 and signed by many of the private sector participants who construct and preserve affordable housing.

"Madame Chair, I am concerned that some of the provisions included in H.R. 4868 may discourage future private sector participation in Federal housing programs and ultimately limit the availability of affordable housing. Some of the more problematic provisions in H.R. 4868 are Hearing Of The House Financial Services Committee - H.R. 4868, Housing Preservation And Tenant Protection Act Of 2010

Section 107 which creates a federal right of refusal which is seen by some as an abrogation of housing assistance contracts or mortgage agreements. Additionally, many of the provisions included in this bill, such as increased enhanced vouchers and project based vouchers, and a requirement that HUD convert rental assistance payments to section 8 project based vouchers, and the grant and loan programs in Section 102 carry significant costs. At this time of significant budget deficits, I am just not sure where we will find the funds to pay for these new and costly provisions.

"I want to take this opportunity to welcome our witnesses on both panels today and again commend my colleagues for their work and commitment to preserving affordable decent housing for low and moderate families."

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